Failing public service providers will be forced to offer customers cash refunds or face government budget cuts, the Prime Minister announced in his keynote speech to his party.

John Major, addressing the Conservative Central Council in Southport, outlined plans for a "citizen's charter" to maintain standards and improve ''every part of the public services''.

''People who depend on public services - patients, passengers, parents, pupils, benefit claimants - all must know where they stand and what service they have a right to expect,'' he said.

Lambasted by critics

He pledged the government would promote and extend competition and privatisation to improve public services as well as create new watchdogs and ombudsmen for consumer protection, transport safety and pollution.

The "citizen's charter" has been lambasted by critics as being a clone of policies muted by Labour and the Liberal Democrats to improve public services.

It is one of Mr Major's 'five great principles' for the country which include devolving power to people through, for example, privatisation of British Coal, British Rail, and the remainder of British Telecom.

A stable and strong economy including greater property ownership and a wider distribution of wealth was also on Mr Major's blueprint for Britain along with a pledge to fight for the country's interests from within Europe.

The fifth principle, however, described Conservatives as the unionist party, "drawing together in partnership the rich traditions of four great nations".

The Prime Minister's speech, trailed as his most important domestic statement since succeeding Mrs Thatcher last November, has aroused Opposition criticism branding it vacuous and without purpose.

But it was an important speech for the new prime minister who is forced to appeal to Thatcherite supporters but also carve a new philosophy for himself and the party.

His outline of a party manifesto, and relentless criticism of Opposition parties, has led many political observers to predict the prime minister could be planning to call a General Election within months.